Consider this: Your company supplies Fortune 1000 company. A reputable industry insider calls you with information that the Fortune 1000 company is struggling financially in a way that is not yet public. Next week you are flying to meet with Fortune 1000 purchasing to re-negotiate the supplier agreement. What if anything should you do with this information?

Many aggressive negotiators would think, “I have leverage, and now I will use it to get some concessions!” They would find a way to bring this topic up. This is actually a very dangerous move.

Using insider information like this is the equivalent to having a Molotov Cocktail. Once you toss it out there, it could burn out of control. There are several reasons:
 The person you are negotiating with may be unaware of the facts and will interpret your gesture as a hardball tactic, which it is.
 It might not be true.
 If it is true, it might not impact you at all, so bringing it up would only create problems where there were none.

What does it have to do with you?

Before you say or do anything you must understand the real and tangible impact Fortune 1000 financial struggles would have on your relationship. After all, it might have no impact what so ever.

This scenario is real. My client called me to discuss his next move. My client decided to enter the negotiations as if he had heard nothing. Internally, he increased the frequency of reports on Fortune 1000’s purchasing and payment history. In reality, Fortune 1000 financial struggles did not impact their purchasing volume or their payments to date.

My only word of advice was to make sure that the contract has a clear policy on late payments. If it didn’t, I suggested that he negotiate a late payment policy and insert it into the contract. Otherwise . . . . zip the lip!

To date, nothing has come from this insider information. No bankruptcy. No changes in Fortune 1000 buying or payment habits. A potentially ugly scene was avoided by using some discretion. AND, his company is protected by a clear and well thought out late payment policy.

This entry was posted on Wednesday, July 15th, 2009 at 5:43 pm and is filed under Leverage. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.